The president of Samsung has confessed that recalling 2.5 million of its Galaxy Note 7 smartphones will cost the company a "heartbreaking amount".

According to Bloomberg, the comment came on Friday when the head of Samsung's mobile business Koh Dong-Jin was asked by reporters about the financial impact of having to recall the phones, following the discovery of a defect in the batteries that caused some handsets to explode while charging.

applevsamsung
Some analysts forecast that the scale of the recall will cost Samsung anything between $1 billion and $5 billion in revenue. Given that Samsung's projected net income is $20.6 billion this year, the firm will undoubtedly absorb the loss. But Dong-Jin's comment could just as easily refer to the cost to the company's manufacturing reputation in its rush to beat Apple's iPhone 7 to market.

In Samsung's haste to beat Cupertino to launch, beginning last year the South Korean firm had brought forward the release of its Galaxy S and Galaxy Note series models by roughly a month. The move was initially deemed a success after it helped Samsung report on its best profit in more than two years, but the strains on its supply chain appear to have backfired disastrously.

"Samsung might have over-exerted itself trying to pre-empt Apple, since everybody knows the iPhones launch in September," said Chang Sea-Jin, business professor at Korea Advanced Institute of Science and Technology and author of Sony vs. Samsung, a history of the electronics giants.

Speaking to Reuters, Sea-Jin called the recall "an unfortunate event; it feels like Samsung rushed a bit, and it's possible that this led to suppliers also being hurried."

Samsung said in a statement to Reuters that it conducts "extensive preparation" for its products and will release them to the market "only after proper completion of the development process".

However, many view the recall as a gift for Apple, which is currently dealing with depressed phone sales and relatively lukewarm anticipation for this year's devices as analysts speculate the company is holding back its most impressive upgrades for 2017.

Indeed, since news emerged of Samsung's mass battery defect, Apple has alerted iPhone parts suppliers to increase production rates, suggesting the company is confident of a late surge in sales of its latest flagship smartphones.

"The time advantage that [Samsung] had on the iPhone, that's evaporated now," said Bryan Ma, an analyst at IDC in Singapore. "It'll hit them this quarter obviously, but if it's something they immediately address and immediately turn around, then there won't be a long-term impact."

With Apple said to be overhauling its mobile design for a tenth anniversary "iPhone 8", and Samsung clearly keen to bounce back and impress after its latest troubles, everything points to 2017 being potentially one of the most ultra-competitive years the smartphone industry has ever seen.

Top Rated Comments

keysofanxiety Avatar
64 months ago
Meanwhile, in Cupertino:

Score: 57 Votes (Like | Disagree)
keysofanxiety Avatar
64 months ago
They could just release the Note 5 all over again, it trumps the iPhone either way.
Not in a million years. Even the current iPhone 6S makes mincemeat of most other phones/phablets in regards to performance.
Score: 22 Votes (Like | Disagree)
JohnApples Avatar
64 months ago
"Give Samsung credit." Oh man. Of course they acknowledged and recalled them, there's a physically dangerous risk. It would be criminal not to. Nobody "gives credit" to car manufacturers or companies that make baby products when they recall their stuff. It's something they NEED to do.

I'd give Samsung credit if they avoided this altogether and made sure their batteries didn't explode in the first place. And no, I'm not saying Apple handles their product issues perfectly. Far from it. But Samsung does not deserve to be praised for having a recall. Good lord.
Score: 18 Votes (Like | Disagree)
keysofanxiety Avatar
64 months ago
First with what? The Note 7 already does stuff and/or has features even the iPhone 8 won't have. :rolleyes:
Yeah, like that whole exploding battery feature. Can your iPhone do that?
Score: 17 Votes (Like | Disagree)
keysofanxiety Avatar
64 months ago
Karma might be a bitch, but Apple could learn something from this.
Yeah, Apple certainly could learn something! Next time Apple rush production to undercut the new Samsung phone, without appropriate quality testing, leading to not identifying issues with phones exploding... :rolleyes:

Let me guess, you'll quote the 2011 dGPU failures or something, as pointing to Apple not doing a similar thing?

So many posters are out of touch with how the real world/businesses work. What Samsung have done in this situation is fully consistent with what all businesses would do. Samsung have not done anything out of the ordinary; well, other than releasing exploding phones.
Score: 16 Votes (Like | Disagree)
NT1440 Avatar
64 months ago
First with what? The Note 7 already does stuff and/or has features even the iPhone 8 won't have. :rolleyes:
And iPhones have features no non-iOS device will ever have, what's your point?

Let's whip out our spec sheets and compare shall we? :rolleyes:

Honestly, sometimes I see the tech fans as having the same "my truck has bigger tailpipes" mentality that I find so sad in people. Get the device that has the features you want/need.
Score: 14 Votes (Like | Disagree)

Top Stories

Pro Display XDR Yella

Apple Working on External Display With Built-In A13 Chip

Friday July 23, 2021 9:37 am PDT by
Apple is developing an external display that includes an A13 chip with Neural Engine, according to a new rumor from 9to5Mac. The A13 chip with Neural Engine would presumably serve as an eGPU, though details are light at this time. Having a CPU/GPU built into the external display could help Macs deliver high-resolution graphics without using all the resources of the computer's internal chip....
maxresdefault

Apple Music to Livestream Premiere of Kanye West's New Album 'Donda' on Thursday

Wednesday July 21, 2021 1:49 am PDT by
Apple Music on Thursday will host a global livestream for the premiere of Kanye West's tenth studio album, titled "Donda." The sold-out event will take place at the Mercedes-Benz Stadium in Atlanta, Georgia, and Apple Music's livestream will start at 8:00 p.m. Eastern Time. The livestream was revealed in a Beats Studio Buds ad that aired during the NBA Finals. The ad features U.S. track...
airpods 3 gizmochina Feature

AirPods 3 Rumored to Launch Alongside iPhone 13 at Expected September Event

Friday July 23, 2021 12:54 am PDT by
The third-generation AirPods will likely launch at the same event revealing Apple's upcoming iPhone 13 lineup, according to a report from DigiTimes, which makes the claim citing sources familiar with the matter. The report as a whole echoes previous reporting that production of the third-generation AirPods will kickstart in August, meaning a launch shortly after can be easily expected. DigiTi...
idos 2 app ios

Apple to Pull 'iDOS 2' DOS Emulator From App Store

Thursday July 22, 2021 3:22 pm PDT by
iDOS 2, an app designed to allow users to play classic DOS games, will soon be pulled from the App Store, the app's creator said today. According to iDOS developer Chaoji Li, he tried to submit an iDOS update with bug fixes to the App Store, but was told that the update was rejected because it violated the 2.5.2 App Store guideline that says apps cannot install or launch executable code.Durin...
iPad mini pro feature

Next iPad Mini Won't Feature Mini-LED Display, Claims Display Analyst

Friday July 23, 2021 8:07 am PDT by
Yesterday, DigiTimes claimed that the upcoming iPad mini will feature a mini-LED display, but now, display analyst Ross Young is going at odds with that report, claiming that while the updated iPad mini continues to be on track for a release this year, it won't feature a mini-LED display. Young says he "confirmed" with Radiant Opto-Electronics, who DigiTimes claims would provide Apple with...
AirPods Pro Beta Firmware

AirPods Pro Beta Firmware Now Available

Wednesday July 21, 2021 6:50 am PDT by
Upcoming AirPods Pro firmware updates are now available to Apple Developer Program members as beta versions. AirPods Pro firmware beta one features FaceTime Spatial Audio and Ambient Noise Reduction. Custom Transparency mode, including Conversation Boost, was initially expected to be included in the beta but appears to have been delayed for a later version. Apple made the announcement...
iPad mini pro feature

Next-Generation iPad Mini Will Reportedly Feature a Mini-LED Display

Thursday July 22, 2021 9:03 am PDT by
Apple is widely rumored to be planning a new iPad mini with a significant redesign, including a larger 8.5-inch to 9-inch display with slimmer bezels, a Touch ID power button instead of a home button, a USB-C port instead of a Lightning connector, and more. According to a paywalled preview of a DigiTimes report today, the sixth-generation iPad mini will also feature a mini-LED display:BLU...
discount m1 macbook yellow

Deals: Shop Record Low Prices Across Apple's Full MacBook Pro and MacBook Air Lineup (Up to $499 Off)

Friday July 23, 2021 8:23 am PDT by
Apple's MacBook Pro and MacBook Air lineup is seeing all-time low discounts across the board today, including the 2019 16-inch MacBook Pro, 2020 13-inch MacBook Air, and 2020 13-inch MacBook Pro. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a purchase, we may receive a small payment, which helps us keep the site running. 13-Inch M1...
ios wifi settings

Apple Confirms iOS 14.7 Fixes WiFi Bug and Many Other Vulnerabilities

Wednesday July 21, 2021 11:38 am PDT by
Following the release of iPadOS 14.7 this morning, Apple has shared details on the security updates that are included in iOS 14.7, iPadOS 14.7, macOS Big Sur 11.5, watchOS 7.6, and tvOS 14.7, all of which came out this week. Notably, Apple's documentation confirms that the iOS 14.7 and iPadOS 14.7 updates address a WiFi-related vulnerability that could impact iOS devices when joining a...
macOS Big Sur Feature Orange

Apple Releases macOS Big Sur 11.5 With Podcast App Updates and Bug Fixes

Wednesday July 21, 2021 10:15 am PDT by
Apple today released macOS Big Sur 11.5, the fifth major update to the macOS Big Sur operating system that launched in November 2020. macOS Big Sur 11.5 comes two months after the release of macOS Big Sur 11.4. The new ‌‌‌‌‌macOS Big Sur‌‌‌‌ 11.5 update can be downloaded for free on all eligible Macs using the Software Update section of System Preferences. macOS Big Sur...